A special purpose unit has been established in the National Industrial and Commercial Investments Limited (NICIL) to spearhead the divestment/privatisation of certain assets of the Guyana Sugar Corporation (GuySuCo).
Minister of Finance Winston Jordan announced the unit and its purpose to the National Assembly yesterday, while seeking $130 million to finance its operations for the rest of the year.
The sum is part of the supplementary provision on the Current and Capital estimates, totalling $6.395 billion, for the period January 1, 2017 to December 31, 2017, that was brought before the House for approval yesterday.
Jordan explained that the unit’s principal function in its early stages would be leading the privatisation process for the Skeldon Estate Factory. However, its functions will eventually go beyond GuySuCo and its budget next year will be far larger than $130 million.
He noted that currently the unit is tasked with hiring an established accounting firm to undertake preparation for privatisation.
“They will also be involved in valuation, preparing prospectus, requests for proposals and other documents, marketing, advertising, developing legal framework etc,” the minister told the House sitting in the Committee of Supply.
The amount requested, he said, includes approximately $30 million for employment, $60 million for professional and legal fees, $20 million for motor vehicle and furniture, while the additional sums will cover other operating expenses.
He stressed that the functions of the unit will extend only to implementing decisions made by GuySuCo in relation to asset divestment.
Government, he noted, was removing this exercise from the purview of GuySuco so that the company can focus on its operation.
Asked what plans government has for any funds earned from this sale, Jordan said that the money would be fed back into the cash-strapped GuySuCo to assist with the servicing of its debts and operational costs.
However, he could not however say how much was likely to be earned from the sale. “These are bids that are going to go out for public tender and we are not sure what the valuation of these assets are,” he said.
The sale of the Skeldon factory is part of government’s plans to restructure the sugar industry into a more viable and profitable business.
Minister of Agriculture Noel Holder had told the National Assembly in May that at the end of the year, the GuySuCo will have three factories and five cultivating sites.
The three factories are Albion/Rose Hall, Blairmont and Uitvlugt/Wales. This formula sees the amalgamation of Albion and Rose Hall and Uitvlugt and Wales. Enmore would be closed at the end of the year.
Additionally, Holder had said that while the corporation would retain as many workers as needed, employees would be leased land to engage in crops which would be decided by the corporation and the Ministry of Agriculture.